A suggestion by Jack Dorsey, a long-standing advocate of Bitcoin BTC $26,577, led to a flurry of online debates within the crypto community. Dorsey stirred the pot by hinting at a possible classification of Ethereum ETH $1,839 as a security, leading to a fiery exchange on Twitter among crypto influencers.
Dorsey’s assertion quickly drew the attention of Udi Wertheimer, a Bitcoin Ordinals developer at Taproot Wizards. Wertheimer took to Twitter on June 6, expressing his dismay over Dorsey’s stance, alluding to him as a “clown”. Dorsey, in response, challenged Wertheimer with a retort, “Is ETH really not a security? Share your wisdom, wizard.” This spurred Wertheimer to refer to an archived video, featuring the current US Securities Exchange Commission Chair, Gary Gensler, where Gensler affirms that due to its significant decentralization, ETH does not fall under the security classification.
Gabor Gurbacs, a strategist affiliated with Tether, a stablecoin issuer, and VanEck, an investment management company, offered his viewpoint. Gurbacs contended that Ethereum’s recent shift towards a proof-of-stake system might have inadvertently invoked securities regulations.
This digital argument unfolded against the backdrop of the SEC’s lawsuits against prominent crypto exchanges Binance and Coinbase, filed on June 5 and 6. The SEC’s contention was that these platforms traded tokens that fell under the category of unregistered securities.
Continuing his Twitter discourse, Dorsey shared an old post from Coinbase CEO Brian Armstrong, endorsing Armstrong’s view of altcoins as a “diversion” and a need for a Bitcoin-centric approach.
Dorsey proceeded to share a video featuring Jack Mallers, the spearhead of Bitcoin Lightning application Strike, reproving Armstrong’s favoritism towards altcoins over a dedicated focus on Bitcoin and its Lightning Network.
In 2021, during his tenure as Twitter’s CEO, Dorsey orchestrated the sale of 140 Ethereum-based nonfungible tokens (NFTs), despite his personal decision against investing in Ether. Furthermore, in August 2021, Dorsey expressed skepticism over Ethereum’s potential, hinting that Ethereum might not be capable of disrupting the technology giants.
Of late, Dorsey has been endorsing Nostr, a budding decentralized platform aiming to rival Twitter. This platform integrates Bitcoin Lightning-based payments within its “Damus” framework.
Dorsey’s faith in Bitcoin has been consistently clear from his promotion of the cryptocurrency, often defining it as the default currency of the internet. His business decisions, such as Square’s substantial investment of $50 million in Bitcoin in 2020, reflect this belief.
Dorsey’s latest endeavor, Nostr, envisions a decentralized social network powered by Bitcoin Lightning payments. This move suggests a leap towards enhanced decentralization and potential privacy improvements. However, the success of Nostr hinges on its ability to generate enough traction to compete with established social media titans.